Just a moment...

⚠ ✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Keyword Search :
AI Tools : New
Ask tax questions in natural language. Powered by AI trained on the TaxTMI legal database. Use AI Tools ➞
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
    6. Text Search
  6. The system will try to fetch results that contains ALL your words.
  7. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
    8. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search ❯
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws---- ❯
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ---- ❯
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
    Act Rules Bills
    Rate of income-tax in case of companies - Budget 2017-18 - Income Tax Rates - For the Assessment Yea...
    Act Rules Bills
    Rate of income-tax in case of every local authority - Budget 2017-18 - Income Tax Rates - For the As...
    Act Rules Bills
    Rate of income-tax in the case of ever firm (partnership firm) - Budget 2017-18 - Income Tax Rates -...
    Act Rules Bills
    Rate of Tax in case of co-operative society - Budget 2017-18 - Income Tax Rates - For the Assessment...
    Act Rules Bills
    Income Tax Rates - For the Assessment Year 2018-19 and Rates for deduction of tax at source from "Sa...
    Case Laws VAT / Sales Tax
    Classification of goods - Impact of use of punctuation mark
    Case Laws Customs
    Withdrawal of Anti-Dumping Duty - Designated Authority has no power to give retrospective relief
    Act Rules GST
    Meaning and scope of supply under GST (Part 2) - Import of services will be treated as supply and wi...
    Act Rules GST
    Meaning and scope of supply under GST (Part 1) - Since CGST, SGST or IGST will be levied on supply o...
    Case Laws Service Tax
    Whether the vessels or ships that are afloat are not goods and immovable property? - CESTAT says Yes...
    Case Laws Service Tax
    Adjustment of excess paid service tax – rule 6(3) of STR, 1994
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Currency conversion using telegraphic transfer buying rate (‘TTBR...
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Documents to be furnished for availing FTC
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) in case of MAT/ AMT
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Lower of the tax payable under the Act and DTAA
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Cases in which no FTC benefit would be available
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) shall be allowed if evidence & undertaking furnished within 6 months ...
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Meaning of foreign tax
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Benefit on proportionate basis
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - FTC benefit in the year in which income offered to tax
❮
❯
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

Open Link
Notes
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
Act Rules Bills
Rate of income-tax in case of companies - Budget 2017-18 - Income Tax Rates - For the Assessment Yea...
Show AI Summary
Corporate tax rate differential for domestic companies introduced, with tiered surcharge rules and specified cess treatment applied.
The Finance Bill revises company tax by setting a lower rate for domestic companies meeting a specified turnover threshold and a higher standard rate otherwise, while maintaining the existing rate for non-domestic companies. Tiered surcharge rates apply differently to domestic companies and to companies other than domestic companies, with marginal relief available. Education Cess and Secondary and Higher Education Cess remain generally applicable, but are not levied on tax deducted or collected at source for domestic companies and other residents under specified entries; both cesses still apply to salary TDS and to non-residents and non-domestic companies.
Act Rules Bills
Rate of income-tax in case of every local authority - Budget 2017-18 - Income Tax Rates - For the As...
Show AI Summary
Rate of income-tax for local authorities remains unchanged; surcharge applies and marginal relief available for high-income local authorities.
Rate of income-tax for every local authority is preserved at the level specified for the prior assessment year. Surcharge is imposed on local authorities whose income exceeds the high-income threshold, levied at a specified percentage, and marginal relief is provided to mitigate abrupt liability increases near that threshold.
Act Rules Bills
Rate of income-tax in the case of ever firm (partnership firm) - Budget 2017-18 - Income Tax Rates -...
Show AI Summary
Firm income-tax rate continues unchanged, with surcharge for higher-income firms and marginal relief available.
The rate of income-tax applicable to every firm continues at the same level as for the preceding assessment year for assessment year 2018-19. For firms with total income exceeding one crore rupees, a surcharge is levied at twelve per cent, and marginal relief is available where applicable.
Act Rules Bills
Rate of Tax in case of co-operative society - Budget 2017-18 - Income Tax Rates - For the Assessment...
Show AI Summary
Co-operative society tax rates remain unchanged for the assessment year; surcharge applies to higher incomes and marginal relief provided.
Rates of income-tax for co-operative society taxpayers remain the same as in the prior assessment year under the First Schedule of the Finance Bill, 2017. A surcharge applies to societies with higher income and marginal relief is provided to mitigate surcharge impact at threshold points.
Act Rules Bills
Income Tax Rates - For the Assessment Year 2018-19 and Rates for deduction of tax at source from "Sa...
Show AI Summary
Income-tax rate structure revised for salaries, advance tax and special cases with senior citizen slabs and surcharge.
Part III of the First Schedule to the Finance Bill, 2017 prescribes the income-tax rates for deduction at source from salaries, advance tax computation and charging of income-tax in special cases for financial year 2017-2018. Tiered progressive rates apply to individuals, HUFs, AOPs, BOIs and specified artificial juridical persons. Distinct nil-tax thresholds and slab treatment are provided for resident individuals aged sixty to less than eighty and for those aged eighty or more. A surcharge of ten per cent applies within a defined high-income range and fifteen per cent above the higher threshold, with marginal relief available.
Case Laws VAT / Sales Tax
Classification of goods - Impact of use of punctuation mark
Show AI Summary
Punctuation in statutory entries limits tax conditions, so excise levy applies only to specifically linked goods.
Punctuation in statutory entries must be given effect; a colon and conjunctions in the schedule create a break separating "leather cloth and inferior or imitation leather cloth ordinarily used in book binding" from other goods, so the condition imposing additional excise duty in lieu of sales tax applies only to the latter group. Historical layout of the entry corroborates this limited reading, and absence of argument before the Tribunal does not estop application of the statutory construction.
Case Laws Customs
Withdrawal of Anti-Dumping Duty - Designated Authority has no power to give retrospective relief
Show AI Summary
Withdrawal of anti dumping duty: Designated Authority lacks power to grant retrospective relief; rescission is prospective.
Designated Authority lacks power to recommend retrospective withdrawal of an anti dumping duty following a mid term review; where domestic producers ceased production and the authority recommended rescission, the government's rescission preserved prior acts, and the tribunal held no rule permits retrospective relief in review proceedings, so withdrawal operates prospectively.
Act Rules GST
Meaning and scope of supply under GST (Part 2) - Import of services will be treated as supply and wi...
Show AI Summary
Importation of services: subject to GST under reverse charge; potential double levy with customs needs exemption.
Importation of services falls within the definition of Supply and is subject to GST under the reverse charge mechanism, creating potential overlap with Customs duty where transactions importing goods are contractually treated as services. Administrative or legislative clarification is needed to prevent concurrent levies, either by Customs exemptions for imports characterised as services or reciprocal GST relief where Customs duties apply. The draft also raises uncertainty about personal use exemptions limited to taxable persons and suggests extension or harmonisation of exemptions for non taxable persons.
Act Rules GST
Meaning and scope of supply under GST (Part 1) - Since CGST, SGST or IGST will be levied on supply o...
Show AI Summary
Scope of supply under GST includes consideration-based transactions, importation of services, and specified free supplies.
The statutory definition of supply under the Model GST Law comprises three categories: supplies for consideration in the course or furtherance of business (sale, transfer, barter, exchange, licence, rental, lease or disposal); importation of services regardless of consideration or business purpose; and specified supplies made without consideration as listed in Schedule I. Clause (a) targets domestic, consideration-based transactions; clause (b) treats importation of services as separately taxable; and clause (c) assimilates certain gratuitous transactions into the tax net via Schedule I.
Case Laws Service Tax
Whether the vessels or ships that are afloat are not goods and immovable property? - CESTAT says Yes...
Show AI Summary
Classification of floating vessels as immovable property may exclude their sale from GST law taxation.
The tribunal held that ships and vessels afloat are not 'goods' but are akin to immovable property because they cannot be severed from the waters; ships are goods only before launch, during breaking up, or when specifically the subject of a sale. As immovable property lies outside the GST domain under the constitutional allocation, this classification raises the question whether GST would apply to sale or supply of floating vessels-a point pending higher judicial scrutiny.
Case Laws Service Tax
Adjustment of excess paid service tax – rule 6(3) of STR, 1994
Show AI Summary
Adjustment of excess service tax permitted as alternative to refund under liberal interpretation of procedural rules.
A liberal reading of Rule 6(3) of the Service Tax Rules, 1994 permits adjustment of excess service tax paid against future liabilities when facts show an excess payment, rather than restricting the assessee solely to a refund claim, consistent with constitutional limits on taxation and the Revenue's concession of excess payment.
Act Rules Income Tax
Foreign Tax Credit (‘FTC’) - Currency conversion using telegraphic transfer buying rate (‘TTBR...
Show AI Summary
Foreign tax credit conversion uses telegraphic transfer buying rate on the last day of preceding month.
Foreign tax credit is determined by converting the currency of the foreign-tax payment at the telegraphic transfer buying rate applicable on the last day of the month immediately preceding the month in which that tax is paid or deducted.
Act Rules Income Tax
Foreign Tax Credit (‘FTC’) - Documents to be furnished for availing FTC
Show AI Summary
Foreign Tax Credit documentation: verified income statement plus certificate and payment or deduction proof to claim credit.
Foreign Tax Credit eligibility requires a verified statement of foreign income and foreign tax paid in the prescribed form, plus a certificate or statement specifying the nature of the income and tax deducted or paid issued by the foreign tax authority, the person who deducted the tax, or signed by the taxpayer, accompanied by a tax challan or online payment acknowledgement for payments and proof of deduction where tax was withheld.
Act Rules Income Tax
Foreign Tax Credit (‘FTC’) in case of MAT/ AMT
Show AI Summary
Foreign tax credit allowed against MAT/AMT like normal tax, but any excess over normal provisions is ignored.
Foreign tax credit under Rule 128 of the Income tax Rules, 1962, is allowable against tax payable under MAT or AMT in the same manner as under the normal provisions; any foreign tax credit available against MAT/AMT that exceeds the credit allowable under normal provisions is ignored when computing MAT/AMT credit.
Act Rules Income Tax
Foreign Tax Credit (‘FTC’) - Lower of the tax payable under the Act and DTAA
Show AI Summary
Foreign tax credit: credit limited to lower of domestic tax and foreign tax; treaty excess is disregarded.
Rule 128 of the Income tax Rules, 1962 limits Foreign Tax Credit to the lesser of domestic tax chargeable on the doubly taxed income and the foreign tax actually paid, and directs that any foreign tax paid in excess of the tax payable under the applicable DTAA be ignored for credit computation.
Act Rules Income Tax
Foreign Tax Credit (‘FTC’) - Cases in which no FTC benefit would be available
Show AI Summary
Foreign Tax Credit denial: no credit for domestic interest, fees or penalties and for disputed foreign taxes.
Rule 128 restricts Foreign Tax Credit by disallowing FTC against interest, fees or penalties payable under the Income-tax Act, and by excluding any foreign tax (or part thereof) that is disputed by the assessee.
Act Rules Income Tax
Foreign Tax Credit (‘FTC’) shall be allowed if evidence & undertaking furnished within 6 months ...
Show AI Summary
Foreign Tax Credit requires evidence of settlement, proof of payment and an undertaking within six months of dispute resolution.
Foreign Tax Credit (FTC) is allowed for disputed foreign tax only if, within six months from the end of the month in which the dispute is finally settled, the assessee furnishes evidence of settlement, evidence that the tax liability has been discharged by the assessee, and an undertaking that no refund in respect of that amount has been or will be claimed.
Act Rules Income Tax
Foreign Tax Credit (‘FTC’) - Meaning of foreign tax
Show AI Summary
Foreign tax definition determines FTC scope: DTAA-covered taxes apply, otherwise income-tax-type foreign levies qualify for credit.
Definition of foreign tax for Foreign Tax Credit under Rule 128: where a DTAA exists, foreign tax is the tax covered by that DTAA; where no DTAA exists, foreign tax is the tax payable under the foreign country's law in the nature of income-tax as defined in the statutory explanation, including excess profits tax or business profits tax charged on profits by central or local authorities.
Act Rules Income Tax
Foreign Tax Credit (‘FTC’) - Benefit on proportionate basis
Show AI Summary
Foreign tax credit proportionate allocation ensures foreign tax relief is apportioned when income is taxed across multiple years.
Foreign tax credit under the Income tax Rules operates on a proportionate allocation principle when the same income is taxable in more than one year; the credit entitlement must be apportioned across the years in which the income is offered to tax so that relief for foreign taxes corresponds to the portion of income taxed in each year.
Act Rules Income Tax
Foreign Tax Credit (‘FTC’) - FTC benefit in the year in which income offered to tax
Show AI Summary
Foreign tax credit allowed when foreign tax corresponds to income offered or assessed to tax in India in the same year.
Foreign tax credit is available to Indian residents for tax paid in a foreign country or specified territory, and is allowed only in the year when the corresponding income is offered to tax or assessed to tax in India, creating a temporal link between domestic taxation of the income and recognition of the foreign tax credit.

TMI Notes

Back

All TMI Notes

Showing Results for :
Reset Filters
No Records Found

TMI Notes

Home › TMI Notes › Income Tax › Act-Rules › Category › This
Back

All TMI Notes

whatsapp Join Channel
Showing Results for : Reset Filters
Income Tax

Comparison of Section 23 "Arrears of rent and unrealised rent received subsequently" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

20 August, 2025

Contents
Acts
Rules & Regulations
Summary
Note

Note

-

Bookmark

Print

Print

Print Options

Section 23 Arrears of rent and unrealised rent received subsequently.

Income-tax Act, 2025 [As Passed]

At a Glance

These documents set out Clause/Section 23 dealing with tax treatment of arrears of rent and unrealised rent realised subsequently under the Income-tax law as presented in the Income Tax Bill, 2025 (old version) and Section 23 of the Income-tax Act, 2025 (as passed). They matter to taxpayers receiving arrears or previously unrealised rent (and to tax authorities assessing such receipts). The texts are substantively the same in operative effect; minor drafting and descriptive differences between the Bill and the Act version are noted below. Effective date or commencement is: Not stated in the document.

Background & Scope

Statutory hooks: The item is denominated as Clause 23 in the Income Tax Bill, 2025 (old version) and as Section 23 in the Income-tax Act, 2025 [As Passed]. The provision falls under the head "Income from house property". It addresses two categories of receipts from tenants: (i) arrears of rent received by an assessee and (ii) unrealised rent that is realised subsequently from a tenant. The text treats such receipts as income from house property for the year in which they are received or realised and prescribes a specific deduction. Definitions or expansive explanations of terms such as "arrears of rent", "unrealised rent", "tenant", "assessee", or "owner" are: Not stated in the document.

Statutory Provision Mode

Text & Scope

The operative elements of both documents are as follows (text summary):

  • The amount of arrears of rent received from a tenant, or unrealised rent realised subsequently from a tenant, shall be deemed to be income from house property for the tax year in which such rent is received or realised.
  • That amount shall be included in the total income of the assessee under the head "Income from house property" in that tax year, "whether the assessee is the owner of the property or not".
  • A deduction equal to 30% of the arrears/unrealised rent referred to above shall be allowed.

Coverage: The provision applies to any assessee receiving such rent receipts from a tenant; it expressly applies irrespective of legal ownership in the year of receipt/realisation. The provision thus draws the tax character to the year of receipt rather than year of accrual/entitlement in some prior year(s).

Interpretation

The text indicates a legislative intent to treat cash receipts of past or previously unrealised rent as income from house property in the year of realisation or receipt. The specific inclusion "whether the assessee is the owner of the property or not" indicates an intent to tax the recipient of the rent receipt on that basis notwithstanding formal ownership status in that year. The statutory instruction to allow 30% as deduction mirrors the standard municipal/ statutory allowance (commonly the standard deduction under the head "Income from house property"); the provision therefore treats such receipts in a manner consistent with routine computation of income from house property, subject to the one-line concession of a fixed 30% deduction. The legislative language is prescriptive and mechanical; no rule-making delegation, conditions, or qualifications are included in the text provided. Legislative policy reasons (e.g., anti-avoidance, revenue realisation, simplification) are: Not stated in the document.

Exceptions/Provisos

No provisos, carve-outs or express exceptions are present in either text. There is no express limitation as to quantum, time-bar considerations, set-off against prior year losses, or interaction with any other head. Specific exceptions (e.g., for statutory tenants, co-owners, instances where rent belonged to another person earlier) are: Not stated in the document.

Illustrations

  • Example 1: A person receives rent arrears of Rs. 1,00,000 in tax year T from a tenant for year T-3. Under the provision Rs. 1,00,000 is treated as income from house property in year T and a deduction of 30% (Rs. 30,000) is allowed, making net taxable amount under house property Rs. 70,000. (This numerical treatment follows directly from the text.)
  • Example 2: An assessee who is not the legal owner of the property in year T but receives previously unrealised rent realised subsequently from a tenant in year T must include that receipt as income from house property in year T and claim 30% deduction on that amount. (Fact pattern and computational implication are directly grounded in the statutory lines: "whether the assessee is the owner of the property or not".)
  • Example 3: If unrealised rent of Rs. 50,000 is realised in year T, the taxable inclusion under house property is Rs. 50,000 less 30% = Rs. 35,000 net. (No further illustrations or contextual limits are provided in the text.)

Interplay

No Rules, Notifications, Circulars, or other statutory cross-references are mentioned in the documents. Interaction with other sections of the Income-tax Act (for example, provisions on computation of income from house property generally, or on assessments, time limits, or set-off) is: Not stated in the document. Any potential interaction with provisions dealing with taxation of receipts under other heads, or with transfer of property or agency relationships, is: Not stated in the document.

Practical Implications

  • Compliance and risk areas: The provision creates a clear compliance obligation to include arrears/unrealised rent realised subsequently in the total income under the head "Income from house property" in the year of receipt/realisation, even where the recipient is not the owner that year. Taxpayers receiving such receipts must ensure correct classification under "Income from house property" rather than treating it under other heads (e.g., "Income from other sources").
  • Record-keeping/evidence: Since the provision focuses on the year of receipt/realisation and disregards ownership status, taxpayers should retain documentary evidence of receipt (bank credits, rent receipts), the nature of the receipt (arrears vs current rent), and correspondence or documents establishing the period to which arrears relate. Proof of any prior ownership status or assignments may be relevant for administrative or audit purposes. The text does not state specific evidentiary standards or required forms-those are: Not stated in the document.

Key Takeaways

  • Arrears of rent and unrealised rent realised subsequently are to be taxed as income from house property in the year of receipt/realisation.
  • The taxable inclusion is to be made under the head "Income from house property" in that year even if the recipient is not the owner in that year.
  • A flat deduction of 30% of the arrears/unrealised rent is allowed against such receipts.
  • The Bill (old version) and the Act (as passed) contain substantively the same operative provisions; differences are limited to drafting/wording and an explanatory line present in the Bill document.
  • No provisos, definitions, transitional rules or cross-references are provided in the text to address timing disputes, ownership transfers, or set-off-such matters are therefore not addressed in the documents.

Differences between the provisions and practical impact of each change

Comparison: The two texts are substantially identical in substantive operation. Differences are limited to minor drafting variations:

  • Drafting/wording: The Act (Section 23) begins "The amount of arrears of rent received by an assessee from a tenant, or the unrealised rent realised subsequently from a tenant, shall be deemed..." while the Bill (Clause 23) uses "The amount of arrears of rent received from a tenant or the unrealised rent realised subsequently from a tenant shall deemed to be..." (the Bill text appears to contain a typographical omission of "be").
    • Practical impact: None on substantive tax effect, but the Act wording is grammatically clearer and thus reduces potential challenges based on drafting ambiguity.
  • Express explanatory sentence: The Bill document ends with an explanatory line: "Clause 23 of the Bill provides for taxability of arrears or unrealised rent received subsequently irrespective of ownership of the property in tax year." The Act document does not include that explanatory line.
    • Practical impact: Minimal-this is an explanatory remark rather than a legal change. The Act's operative clauses already contain the substance ("whether the assessee is the owner ... or not").
  • Labeling: One document is presented as "Clause 23 - Income Tax Bill, 2025 - Old Version" while the other is "Section 23 - Income-tax Act, 2025 [As Passed]".
    • Practical impact: Reflects legislative progression from Bill to Act; substantive approach unchanged.

Action Points (derived from the text)

  • Taxpayers receiving arrears or previously unrealised rent in a tax year should include the gross receipt under "Income from house property" and claim the 30% deduction provided by the provision.
  • Maintain contemporaneous records showing receipt, the source tenant, and the period to which the arrears relate; retain documents concerning ownership status if relevant for other legal or accounting purposes.
  • Where ownership has changed between the period of accrual and the period of receipt/realisation, be aware that the person receiving the money is taxed under house property in the year of receipt, per the statutory language.
  • Consider review of prior tax filings only to the extent the text or other applicable law obliges adjustment: the document is silent on retrospective assessment, set-off, or relief mechanisms - those are Not stated in the document.

Full Text:

Section 23 Arrears of rent and unrealised rent received subsequently.

Topics

Acts Income Tax
Next ➔